Ferrovial expands UK presence with Enterprise buy
MADRID (Reuters) - Ferrovial (FER.MC) is to buy British utility services company Enterprise Plc for 385 million pounds ($589 million) from 3i Group (III.L), the Spanish infrastructure group's first major purchase after a long debt-cutting drive.
The company has been selling assets since a 2006 deal to buy control of British airports operator BAA - now Heathrow Airport Holdings - came unstuck during the global financial crisis, as was the case with many transactions done before the crash.
Ferrovial said on Thursday that Enterprise, which will be integrated within British unit Amey, will double its presence in the British services sector.
Fresh from a string of asset sales - including stakes in BAA, Ferrovial started 2013 with a 1.5 billion euro ($2.0 billion) net cash position, giving it scope to expand or return cash to shareholders.
"This acquisition strengthens its footprint in the UK, where Ferrovial has a good knowledge of the services business," N+1 Equities analyst Jose Ramon Ocina said.
Analysts said the acquisition price - 6.4 times EV/EBITDA, a measure of relative value - looked reasonable and highlighted potential synergies, which Ferrovial estimated at 40 million pounds.
Ferrovial shares, up 7 percent so far this year, were down 0.7 percent at 11.89 euros at 1000 GMT, outperforming a 1.4 percent lower Madrid blue-chip index .IBEX.
The company has relied increasingly on business outside Spain to shield it from a deep recession that has weighed on its construction and services arms at home.
"This acquisition fits with our strategic objective of profitable growth through selective acquisitions and it enables us to expand our services business," chief executive Inigo Meiras said.
Completion of the Enterprise deal was expected by end-April once European Commission approval has been granted.
Enterprise reported 2012 revenue of 1.1 billion pounds, excluding its joint venture with Mouchel for highway maintenance services, which will not be included in the acquisition, Ferrovial said.
($1 = 0.6535 pound = 0.7479 euro)
(Additional reporting by Paul Day; Editing by David Goodman and Dan Lalor)